Foreclosure activity up 15.6% in California

[Bush_Eats_Beef]

Silicon Valley/San Jose Business Journal - 6:33 AM PST Friday

Foreclosure activity up 15.6% in California

http://www.bizjournals.com/sanjose/stories/2006/01/30/daily52.html?f=et79&hbx=e_du

Foreclosure activity in California was up 15.6 percent in the last three months of 2005, according to a report released on Thursday. Lending institutions sent 14,999 default notices to California homeowners during the October-to-December period, according to Dataquick Information Systems.

That was up 19 percent from the third quarter, and up 15.6 percent from 2004's fourth quarter.

All regions of the state saw an increase in foreclosure activity, ranging from 10.5 percent in the Bay Area to 19.6 percent in Southern California.

Santa Clara county saw a 5.6 percent increase, while Santa Cruz saw a 14.8 percent increase and Monterey went up 25.3 percent.

[phantom power]

1. Fire-sale bargains for the wealthy...

[Auntie Bush]

2. Why all those foreclosures...the economy is doing great?

Isn't that what bush* said? :shrug:

[free4now]

12. ITs the quiet crime against Americans

see here

www.msfraud.org

The American Dream of homeownership is being turned into

a NIGHTMARE !
This nightmare is orchestrated by a growing number of
well-known, corrupt and ruthless mortgage servicers who manufacture defaults on performing loans to then flood the account with illegal fees strategically designed to STEAL the borrower's equity -- and ultimately the property. In addition, the borrower's credit is destroyed to prevent them from refinancing with another lender. Read "The Issue".



When the property owner runs out of resources to fight back, their property is then stolen. Investigations verify this scheme is deliberate, and as one attorney put it;'criminally brilliant'.

[Tempest]

3. Part of the reason was from the new bankruptcy laws

People were trying to beat the clock on the new laws.


New Bankruptcy Law makes it Harder to Stop Foreclosure
http://www.buzzle.com/editorials/7-28-2005-73882.asp

[no_hypocrisy]

4. "The State of our Union is strong -- and together we will make it

stronger." George W. Bush, State of the Union Address 2006.

[ixion]

5. the lashback from the interest only ARM

which is, essentially, the same as buying a house with a credit card.

I looked at those, at decided it was a bad idea, specifically for reasons like this.

[Tempest]

6. The ARM backlash hasn't really started yet

But by God, it will and soon.

And it's going to get real ugly in America considering 43% of mortgages in the last quarter of 2005 were ARM loans. ARM loans made up 24% of all mortgage loans in 2005.

[salin]

14. I didn't realize how fast the rate of folks financing through

this exceptionally risky loan "product" in the past year. 43% of all mortgages in the last quarter? Yikes. Almost like gambling - gambling that in two years I will be able to afford (the higher payments) that I can't afford now - or that the housing market will continue to inflate prices at a rate that I can sell and make money or at lease not still owe - or that I lose the house. I wonder how many folks taking these loans realize there is a pretty decent chance that they will lose the house - and very possibly still OWE on the house.

[laheina]

13. A huge number of people have

bought houses with 100% financing and interest only loans in the last few years. Expect this to get worse.

[LostinVA]

15. 100% financing and interest-only loans aren't the same thing

I have a 30-year fixed at 5.5%, put down next to nothing, and still have a house payment (NOT a mortgage payment) hundreds of dollars lower than my rent was. I do not have a risky loan. Compare that to a coworker who makes what I makes, but bought a house that cost 30% more than mine, with zero interest. She's insane. I bought the house I NEED, not the one I WANTED.

[laheina]

18. Yes, I know

But you can get a loan with both attributes.

I was saying that they are both part of a scary trend--that's going to end up biting consumers in the asses. The housing market is so overinflated in CA, that homeowners are taking advantage of both just to get into a house. It's all kind of isnsane.

[Gormy Cuss]

7. Not a good sign, but it must be put in perspective.

It's still a relatively low foreclosure rate.
Dataquick said foreclosure activity hit a low during the third quarter of 2004 when 12,145 default notices were recorded. Defaults peaked in 1996's first quarter at 59,897.

The high appreciation rates in most of the state* means that owners have a fall back before foreclosure if their finances merely hit a bump in the road-- either refi to access equity or sell the house rather than default. Those who are defaulting are more likely to be the ones who refinanced their houses to take out equity for other uses and still haven't been able to get ahead.

Yeah, it's a great economy ---thanks W.

*average appreciation rate statewide 2004-2005 was around 20%.

[HockeyMom]

8. New York cannot be far behind

[lovuian]

9. The California market just was getting totally unrealistic

its a correction to prices rising 30% in a year...

[FloridaPat]

10. That's 5,000 a month in a state with 34 million people.

That's about 35 more people a month. Those don't sound like really big numbers to me.

[truthisfreedom]

16. 15% increase is 1.5 people per 10 people. that's a large increase.

sometimes the numbers don't mean anything.

[VegasWolf]

11. Bush's "jobless recovery" economy has already peaked. nt

[cliss]

17. This is bad news and here's why -

From October - December there were 15,000 defaults. Now, a default is when you've gone about 5 or 6 months without paying your mortgage. The bank or lending institution is about to seize your property. It will be sold to the highest bidder.

The previous owner will probably lose everything they have invested in the house.

Compare this to a different scenario. The home owners are in trouble financially. One of the spouses has lost his job. The two sit at the dining room table and discuss their options. They know they will lose the house. In order to fend off foreclosure, they hurry up and sell the house. They might not get as much as they wanted, but at least they will get some money out of it.

A default is a sign that people have hit rock bottom. Also, consider that there is usually a family living in that house, as opposed to a single person. So 15,000 defaults represents maybe 60,000 people - now the figure looks more ominous.

This is only the beginning.